Is there a long term synergy between advertisers and YouTube?

According to numbers provided by traffic-tracking company ComScore Networks, YouTube received 4.2 million unique visitors in February. Those numbers are good enough to outpace Apple Computer’s iTunes (3.5 million) and put it within spitting distance of eBaumsworld.com (4.4 million) and AOL Video (4.7 million), both of which have been in business longer.

Impressive as this trend is .. it hides some important observations

YouTube has gained it’s success by judiciously mixing professionally made clips, including music videos and movie trailers, with homemade content. This has seen number of viewings jump up from 3 million a day to 30 million since the Web site’s December launch. No doubt, some advertisers are gaining traction – like Nike with their Ronaldinho clip.

But YouTube cannot continue this indefinitely else it would disrupt the user experience as YouTube (rightly) fears and therefore, this model is not scaleable.

So, is there a long term synergy between advertisers and YouTube

The answer lies in advertisers providing something to users which they do not get currently. That ‘missing link’ is subsidising the mobile component of YouTube!

A mobile version of YouTube (as YouTube stands currently) could be viewed as an A2P(application to person) application. Users could simply download a clip on to their 3G phones. Unlike P2P (directly sending clips person to person), A2P is relatively simple.

(Note: This is because, P2P applications need us to know the capabilities of phones at both ends and that can be tricky – not just for the device itself – but for the support provided by the intervening infrastructure players such as the mobile operators because the sending and the receiving mobile operator may not support video clips uniformly. In fact, the success of A2P content has been demonstrated by A2P MMS(picture messaging) where people download a simple picture from a site as opposed to P2P MMS which involves sending pictures directly to each other. Video is no different conceptually except for being a richer medium

)

Thus, YouTube can be extended to mobile devices as it stands.

The critical gap is ‘bandwidth costs’. The moment we send a clip ‘over the air’ – someone incurs a cost. That someone is the ‘user’.

If advertisers could fund this gap(both for their own clips but also for the user’s homemade clips), we have the seeds of a viable and a scaleable model which is user centric.

The users are now getting something they never got before in return for viewing an advertisement. The content they are getting is ‘their’ content – hence valuable.